Into reverse: redesigning veil piercing – Legal Studies
‘This paper considers the status of reverse veil piercing (RVP) in the UK courts and provides a framework for developing it in a coherent manner. It considers the recent emergence of RVP and then considers the concept of separability with regard to corporate personality and its impact on veil piercing. In doing so it draws out the important difference between RVP, which impacts entity shielding, and forward veil piercing (FVP), which impacts limited liability. It then considers US jurisprudence on RVP and the development of RVP in the Delaware courts, and then the historical development of shadow RVP in the UK courts. The paper concludes that continuing the process begun by the Supreme Court in Hurstwood Properties Ltd v Rossendale Borough Council of unbundling FVP from RVP opens the way for the reemergence of RVP that sets the limits of evasive entity shielding in a similar manner to the Delaware courts and the UK historical shadow case law, while also weighing the wider third party considerations in an RVP. Without this we would argue our law risks judicial intervention through RVP being eroded and evasive entity shielding becoming a mechanism for unscrupulous debtors to avoid outstanding liabilities.’
Legal Studies, 24th February 2025
Source: www.cambridge.org
